Reflection: The Wage Penalty for Motherhood

Michelle J. Budig & Paula England’s 2001 study “The Wage Penalty for Motherhood” identifies a 7% wage penalty for mothers, per child, and explores the potential causes underpinning the lower pay associated with motherhood. Though the study focuses on the United States, further research has shown that mothers elsewhere are also persistently paid less than men and women without children. After testing a number of possible causes for the penalty – including breaks in employment and shifts to part-time positions, for instance – Budig & England conclude that two-thirds of the penalty cannot be definitively explained. Instead, they posit that much of it may derive from the impact of motherhood on women’s productivity and employer discrimination.

All of society benefits from children raised well. Despite providing a myriad of benefits, the cost of and responsibility for childcare is disproportionately borne by mothers. This work opens an important discussion on how society conceptualizes responsibility for childcare and prompts us to consider how to redistribute its cost more equally. How might policy intervene to reduce – or, even better, eliminate – the penalty?

The study’s authors suggest that mothers may be reimbursed if this cost is socialized through welfare initiatives, such as family allowances and expanded medical and childcare. Casting a quick glance at countries where such policies are already in place – for instance, in Canada, where the Canada Child Benefit is available to qualifying parents who are primary child caregivers, or in Denmark, which provides generously subsidized childcare – the motherhood wage penalty still exists at levels comparable to countries without similar redistributional policies.

In reality, the impact of implementing work-family harmonization policies, such as parental leave and subsidized child care, can’t be disentangled from the wider welfare context they exist within. Many Western welfare regimes, historically informed by the male breadwinner model, have begun to move towards more progressive systems that support dual-earning families by encouraging and supporting gender equality and women’s active labour force participation. However, these efforts may be limited in their effectiveness if they aren’t supported by policies to ensure parents have their child care needs met, too.

In more recent scholarship, Budig, Misra & Boeckmann (2015) highlight three policy domains influential in shaping the magnitude and nature of the wage penalty for motherhood. Using data from 22 different countries, this work finds that states with the smallest wage penalties for motherhood achieve this through a combination of publicly funded childcare, moderate-length maternity and paternity leaves, and lower tax rates on secondary earners. These policies are underlined by an important common aim: ensuring that women can remain attached to the labour market when they become mothers.

Reducing the wage penalty faced by mothers is clearly no mean feat, given that it is shaped by an array of social, welfare and labour market policies as well as gender norms and attitudes towards care. It is, however, essential work for creating a just society. The wage penalty is inextricably linked to broader issues of inequality – intensifying disparities in lifetime earnings, employment outcomes, and gendered imbalances across other domains of life. The assumptions that work-family harmonization and welfare policies are built on play an essential role in their effectiveness. Broader welfare reform that pushes a fundamental change in society’s perceptions of gender roles is needed to eliminate the wage penalty and promote gender equality in child-rearing.